-- Posted Friday, 28 April 2006 | Digg This Article

INSIGNIA CONSULTANTS
Precious Metals Market Update for 28th April, 2006
GOLD	SILVER
COMEX GOLD JUNE FUTURE -- $638.30	COMEX SILVER JULY FUTURE -- $1270.00
EXPECTED TRADING RANGE
GOLD -- $614.10 -- $660.60	SILVER -- $1172.50 - $1450.50
COPPER AND CRUDE OIL -- EXPECTED TRADING RANGE
COPPER JULY -- $308.40 - $352.40	NYMEX CRUDE OIL JUNE  - $68.20 - $75.20
MULTI COMMODITY EXCHANGE OF INDIA (MCX)
GOLD JUNE FUTURE/10 GRAMS	SILVER JULY FUTURE/KG
Rs.9,190- Rs.9,850	Rs.18,100 - Rs.23,200
COPPER JULY FUTURE	CRUDE OIL MAY FUTURE
Rs.304.35 - Rs.352.20	Rs.3,050 - Rs.3,325
GENERAL MARKET CONDITIONS
First came the Chinese interest rate hike in Asian session yesterday. The People's Bank of China said it will raise the one-year lending rate to 5.85 percent from 5.58 percent. China's 10.2 percent expansion in the first quarter helped power economies around the world and led to higher rates in the U.S., Asia and Europe. Then Fed chairman Bernanke’s testimony, which was more hawkish this time on interest rates as he gave his strongest signal yet that the Fed may pause in its cycle of interest rate increases. But he emphasised it would not prevent the Fed from raising rates again if the outlook for inflation deteriorated. These events resulted in higher volatility in gold and silver. Silver was true to its historical form and volatility was at its best never witnessed over the past one year. Copper fell after the Chinese interest rate hike while gold pared its intra day’s losses. Silver July future fell to a low of $1230 only to rally to $1325 before settling higher at $1259.00 Gold June futures settled at $636.30.   Silver ETF is expected to be listed today after the Securities and Exchange Commission, approved plans by Barclays Global Investors to list its iShares silver trust on the American Stock Exchange. The market has been anticipating the launch of silver ETF ever since the bank made an application last autumn to the SEC for approval of the new investment product. It has been the biggest single factor behind the strong rally in silver prices over the last eight months. Barclays placed 1.5m ounces of silver with a custodian recently to back up the ETF. The impact on ETF listing on silver prices is bullish as silver is an industrial as well as precious metal. The total value of physical global silver is nothing as compared to gold. Unless silver prices do not remain firm or rise, Barclays global will not be able to higher return to silver ETF investors. It’s in the interest of Barclays global to ensure that silver prices rise over the coming months and in our opinion they will do every thing to make silver ETF a durable fund.   U.N.'s nuclear watchdog IAEA is set to report today that Iran has failed to meet a Security Council demand to cease uranium enrichment. Not only did Iran fail to heed the 30-day deadline, it has actually announced new breakthroughs in its enrichment experiments and warned that it plans to expand its activities and perhaps even export its know-how to other countries. But Iran's defiance, which has included saber rattling about how it would respond to any potential U.S. military action , may actually be based on a sober diplomatic calculation: The U.S. has been unable to forge a U.N. consensus behind any steps to pressure Iran, partly because of skepticism over Washington's own intentions. In our view the Iran crisis will remain at a stalemate, at least for now which will continue to support gold, silver and crude oil prices.   I was hearing the Fed chairman’s testimony and one of the questions being popped upto to Mr. Bernanke was on the current gold prices rise and a falling US dollar versus the gold. Mr.Bernanke replied by saying that the current rise was more due to geopolitical risk apart from inflation risk. But if I read behind the words, in my view, the Fed may intervene indirectly to suppress gold prices from rising over the coming months. Whether the Fed will be successful, only time will tell.   It’s a weekend. Traders will either square off or go long over the weekend. Silver and copper may futures are also expiring. Expect another volatile day, But the closing will be firm.
GOLD
Gold needs to break $652.00 - $655 zone for $735. On the lower side $623.60 is the support with $614.10 as the key short term support. Only a consolidated fall below $614.10 will result in $600.00 and $593.80.
SILVER
Silver needs to close over $1285 for further gains to $1386 and $1450 next week. On the lower side there is a technical congestion between $1220.00 and $1246.50 and further between $1160.00 and $1172.50 both of which are holding well.
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Happy Profitable Trading & A Great Weekend.
Disclaimer : Any opinions as to the commentary, market information, and future direction of
prices of specific currencies, precious metals, base metals, or equity indices reflect the views
of the individual analyst, In no event shall Insignia Consultants or its employees  have any liability
for any losses incurred in connection with any decision made, action or inaction taken by any
party  in reliance upon the information provided in this material; or in any delays, inaccuracies,
errors in, or omissions of Information.

-- Posted Friday, 28 April 2006 | Digg This Article

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